Vistara has reportedly started preparations for merging its staff with Air India. Both the Indian airlines are part of the Tata Group and the move comes as the Tata family seeks to strengthen its aviation empire in order to compete with market leader IndiGo. This development comes as both carriers wait for regulatory approvals for their merger.
While addressing the media, Vistara Chief Executive Officer Vinod Kannan on Monday (July 17) said, “The preparation of integration of the staff has started”, adding that the group is expecting the regulatory clearances formalities to be completed by April 2024.
As per the report, Vistara CEO informed that the company has put together a team to discuss what should be the “end structure” of the integrated organization. The Indian carrier has started talking to its pilots and cabin crew about the process of the merger.
All about Vistara-Air India Merger
Vistara is now co-owned by Tata Group and Singapore Airlines Ltd. A Bloomberg report stated that Vistara will be folded into Air India under a deal announced in November, giving the Tatas more heft to go up against dominant budget carrier IndiGo.
The report also added that Singapore Air will receive a 25.1% stake in the combined entity in exchange for its interest in Vistara and a $250 million investment.
The combined airline will be named after Air India, while Vistara brand will be scrapped, the report quoted Air India’s CEO Campbell Wilson as saying.
Vistara, which will have a fleet of 70 aircraft by the time the merger is completed, plans to increase capacity to Dubai, Bali and Bahrain during that time, Kannan said. The airline operates a fleet of 61 aircraft, including Airbus SE A320neo narrowbodies and four larger Boeing Co. 787-9 Dreamliners.
The Tatas founded Air India’s predecessor in the 1930s and took over the national flag-carrier again in 2022 after decades of decline. Since then, the country’s biggest industrial conglomerate has been rebuilding the company, making record plane orders alongside Indigo.
India’s antitrust regulator has given out show-cause notices raising concerns about the merger, Kannan said. He contends that IndiGo’s control of 63% of the domestic market is a bigger issue than a potential duopoly emerging from the consolidation. Air India currently has 9.7% of the market and Vistara has 8%.
(With inputs from Bloomberg)